Wholesaler Metro has reached a 'commercial agreement' with a consortium comprised of The SCP Group and x+bricks on the sale of its Real hypermarket business.
According to the terms of the sale, Real will be sold at an enterprise value of €1 billion, and based on the commercial agreement, Metro anticipates a net cash inflow of approximately €300 million.
'Metro continues to expect to receive more than €1.5 billion in net proceeds, including all transaction costs from the sale of both Real and a majority stake in its Chinese operations,' the wholesaler said in a statement.
The terms of the transaction also anticipate that Metro's service companies will continue to provide services to Real for a transition period, which will decrease over time.
The company will address this resulting excess capacity by engaging in 'proactive efficiency measures' which will lead to recurring savings, it added.
These measures are expected to result in a one-off cost of around €200 million in the financial years 2019/20 to 2021/22.
Metro added that the binding agreement has not yet been concluded, with the approval of the commercial agreement still pending by both corporate bodies. In addition, the completion of the transaction is also subject to approval by anti-trust and regulatory authorities, Metro added.
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